We look at the practices found to be unlawful by CFPB examiners in these markets, discuss what the findings signal for future scrutiny of these markets by the “new CFPB”, and share practical takeaways for companies operating in these markets. Issues highlighted in our conversation include the CFPB’s findings regarding “unreliable furnishers,” furnisher handling of “frivolous or irrelevant” disputes, interest accrual on debts in collection, and mortgage servicer consideration of private mortgage insurance termination dates when estimating disbursements in an annual escrow analysis.… Continue Reading
fair lending
New York DFS enters into two dealer finance charge consent orders
By Ballard CFS Group on
After announcing several years ago that it intended to pick up with fair lending enforcement in the indirect auto finance market where the CFPB left off, the New York Department of Financial Services has announced two consent orders with smaller, New York-chartered banks based on the allegation that allowing auto dealers to negotiate the retail prices of retail installment contracts resulted in a disparate impact on the basis of race and national origin.… Continue Reading
GAO Issues Report Finding that CFPB Needs to Assess the Impact of Recent Changes to its Fair Lending Activities
By Richard J. Andreano, Jr. on
During May 2021, the federal Government Accountability Office (“GAO”) issued a report (GAO-21-393) containing findings from its review of issues related to the CFPB’s oversight and enforcement of the Equal Credit Opportunity Act (“ECOA”) and the Home Mortgage Disclosure Act (“HMDA”). Specifically, the report examines how the CFPB has (i) managed the reorganization of its Office of Fair Lending and Equal Opportunity and related risks during 2018, (ii) monitored and reported on its fair lending performance, and (iii) used new HMDA data fields to analyze and support its fair lending activities. … Continue Reading
CFPB issues 2020 fair lending report
By Ballard CFS Group on
The CFPB recently issued its annual fair lending report. The report describes the CFPB’s fair lending activities in supervision and enforcement; guidance and rulemaking; interagency coordination; and outreach and education for 2020.
The report states that the Bureau announced two public fair lending enforcement actions in 2020. One of those actions represented the CFPB’s first ever redlining complaint against a non-bank mortgage lender and the other action involved allegations of inaccurate HMDA data reporting. … Continue Reading
FDIC Consumer Compliance Supervisory Highlights includes fair lending issues
By John L. Culhane, Jr. on
While much attention has been paid to the “new CFPB’s” plans to make fair lending a top priority, the fair lending practices of financial institutions supervised by the federal banking agencies are also likely to face greater scrutiny under the Biden Administration.
In its Consumer Compliance Supervisory Highlights, the FDIC describes several matters involving fair lending that were identified during consumer compliance examinations conducted in 2020 and referred to the DOJ because the FDIC concluded that it had reason to believe that the creditor had engaged in a pattern or practice of discrimination. … Continue Reading
CFPB Issues Interpretive Rule Clarifying that Sex Discrimination under ECOA and Regulation B Includes Sexual Orientation and Gender Identity Discrimination
Under the leadership of Acting CFPB Director Dave Uejio, the Bureau issued an interpretive rule on March 9, 2021 clarifying that the prohibition against sex discrimination under the Equal Credit Opportunity Act (“ECOA”) and Regulation B includes sexual orientation and gender identity discrimination. This prohibition includes discrimination based on actual or perceived non-conformity with traditional sex- or gender-based stereotypes, and discrimination based on an applicant’s social or other associations.… Continue Reading
New York Dept. of Financial Services announces fair lending agreement with nonbank mortgage lender and releases redlining report
By Richard J. Andreano, Jr. & Ballard CFS Group on
The New York Department of Financial Services (DFS) recently announced that it has entered into an agreement with Hunt Mortgage, a licensed mortgage banker, to address the DFS’s findings that there was a “demonstrable lack of lending to minorities and in majority-minority neighborhoods in Western and Central New York by Hunt Mortgage.” … Continue Reading
FTC Issues Annual ECOA Report to CFPB
By Ballard CFS Group on
On January 26, 2021, the FTC sent its annual letter to the CFPB reporting on the FTC’s activities related to the Equal Credit Opportunity Act (“ECOA”) and Regulation B. The Bureau leverages the FTC’s annual letter for its own Annual Report to Congress on ECOA.
The FTC has authority to enforce the ECOA and Regulation B with respect to nonbank financial service providers within its jurisdiction.… Continue Reading
CFPB Summer 2020 Supervisory Highlights looks at consumer reporting, debt collection, deposits, fair lending, mortgage servicing, and payday lending
The CFPB has released the Summer 2020 edition of its Supervisory Highlights. The report discusses the Bureau’s examinations in the areas of consumer reporting, debt collection, deposits, fair lending, mortgage servicing, and payday lending that were completed between September 2019 and December 2019.
Key findings are described below.
Consumer reporting. … Continue Reading
CFPB 2020 fair lending report highlights adverse action notices when using artificial intelligence
By John L. Culhane, Jr. & Ballard CFS Group on
The CFPB’s annual fair lending report covering its 2019 activities is scheduled to be published in tomorrow’s Federal Register. While most of the report recycles information about which we have previously blogged, it does contain the following noteworthy information:
- The section of the report on “Innovations in access to credit” includes a subsection about “providing adverse action notices when using artificial intelligence and machine learning models.”